Senegal the next big thing in oil, company says

Emerging oil and gas basins in and around the waters off the West African coast in Senegal are the world's next hot spots, an Australian energy company said.

Australia's FAR Ltd. presented at an energy conference in Western Australia information on its prospects off the coast of Senegal. Emerging as one of the better prospects in its portfolio, the company said Senegal is at the dawn of development as no offshore oil exploration has been done in four decades and no deepwater drilling has ever been conducted in national waters.

With contingent resources of around 200 million barrels of oil, the company said the SNE oil field offshore Senegal met the minimum threshold to be considered commercial. In its presentation, the region as a whole is the "world hot spot for oil and gas discovery."

FAR is focusing the bulk of its spending and exploration efforts on emerging basins off the coast of West Africa. In a report on the first half of 2016, the company said its exploration and evaluation assets increased by around 60 percent to $96.8 million, which it said reflected the funding for four appraisals wells offshore Senegal.

The company is "scratching the surface" of the potential offshore Senegal and the undrilled exploration prospects may be closer to the billion-barrel mark, it said in its presentation.

FAR said development planning for the SNE field is under way and the prospect is now at the very early stages of engineering and design. For production, a floating production storage and offloading concept is envisioned with a peak production rate of 140,000 barrels of oil per day.

The Senegalese development comes at a time when energy companies are reviewing their portfolio options against a price for crude oil that's less than half what it was two years ago. FAR said, however, that its offshore costs have declined more than 20 percent since 2014.